Vodafone Website Advertisement
Meeting 6 March 2007
Advertisement: Vodafone New Zealand Limited
Complaint: The Vodafone website advertisement was headed:
Information presented below said:
"For On Account customers only
Credit Limit is an easy way to help keep your mobile costs in check. It's like
the spending limit on your credit card.
It could be a sum you choose yourself or a limit that we give you.
For On Account customers only
Credit Limit is an easy way to help keep your mobile costs in check. It's like the spending limit on your credit card.
It could be a some you choose yourself or a limit that we give you.
How it works
Once you reach your Credit Limit, you may not be able to make any more calls out from your mobile (including unused free minutes on your rate plan) except to 111. However, you may still be able to TXT messages and can still receive incoming calls and TXT messages. ....
Complainant, E. Ross, said:
"Where: Vodafone website
Product: Credit limit
I purchased a Vodafone phone and changed to a 200 plus plan. At the time of purchase I was definite that I did not wish to run up large cellular phone bills. I was advised that I could control my spending by setting a credit limit. I refer to Vodafone website http://www.vodafone.co.nz/business/10.1.3_2_credit_limit.jsp which states "Credit limit is an easy wasy to help keep your mobile costs in check. It is like the spending limit on your credit card"
On the 10 November 2006 I was texted and advised that I had exceeded my credit limit. I immediately paid $60 which would have covered the bill on the understanding that my credit limit was set at $45. To my amazement I recieve another text 30 minutes later to say that I was still in excess of my credit limit and owed $62.70. This made the bill set at $127.70, whilst I had a credit limit of $45. Further frustrations have been encounted as to contact Vodafone a answering system that can take upwards of 40 minutes to have an operator that can not help. Responses such as the system is down I can not help, we have introduced more services and the call system can not answer, credit limit is only a guide and failure of return calls and replies to letter sent to Vodafone left unanswered.
I allege that Vodafone have deliberately misled me in their advertising. Assurances that I could set a credit limit to keep my vodafone costs in check and it is just like a credit card have been proven false. The fact that the acccount reached @127.60 and now standing at $135.49 with the $60 having already been deducted is prime facia evidence that this has been false advertising. As with the just like a credit card, what credit card allow funds to be charged more than the credit limit, in fact over 100%."
The Chairman ruled that the following provision was relevant:
Code of Ethics
Rule 2: Truthful Presentation - Advertisements should not contain any statement or visual presentation or create an overall impression which directly or by implication, omission, ambiguity or exaggerated claim is misleading or deceptive, is likely to deceive or mislead the consumer, makes false and misleading representation, abuses the trust of the consumer or exploits his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is not considered to be misleading).
The Advertiser, Vodafone New Zealand Limited, said:
"Thank you for the opportunity to respond to E. Ross' complaint.
E. Ross alleges that our advertising is "deliberately misleading". The Complainant quotes the second paragraph of the "Credit Limit" page of our website: "Credit limit is an easy way to help keep your mobile costs in check. It's like the spending limit on your credit card". He says our advertising is false because, after he set his credit limit at $45, his account reached $127.60 and currently stands at $135.40, notwithstanding a $60 deduction. He asks, in his words: "what credit card allows funds to be charged more than the credit limit, in fact over 100%?"
We believe that our credit limit operates just as we explain it on our website, and that customers who read beyond the second paragraph of our web page would not experience the frustration E. Ross recounts.
Immediately below the sentences E. Ross quotes there is a heading "How it Works". Beneath that heading we explain that we notify customers by text when they reach their credit limit, and that: "It is important for you to take notice of this TXT message as you are responsible for all charges incurred if you go over your Credit Limit." (Here, as elsewhere in quotations from our webpage in this letter, the emphasis is added, and the sentences highlighted on the attached copy posted out).
We make the point under this heading that even after a credit limit is reached and outbound calls blocked, customers may still send texts and receive inbound calls: "When you have hit your Credit Limit, you may not be able to make any more calls out from your mobile (including unused free minutes on your rate plan) except to 111. However, you may still be able to send TXT messages and can still receive incoming calls and TXT messages."
So customers are told that they may continue to send texts after notification that a credit limit is reached, and will be responsible for charges for those texts. But there are other ways in which customers may be charged more than their credit limit, and we devote the next section of the webpage to explaining them. We introduce this section, headed up: "Ways you might exceed your limit", by reiterating the point: "It's important that you know about the ways you might exceed your Credit Limit as you are liable for all charges to your account, whether they are incurred before or after you hit your Credit Limit."
We then enumerate those ways, which include the timing of credit checks (we credit check accounts against limits several times a day, but in between credit checks charges may go beyond the set limit), billing delays (international calls take up to 24 hours, 0900 calls up to 3 weeks before reaching a customer account), and the fact that access fees are added monthly and are over and above the charges checked by the credit limit. Each of these ways is explained to a customer who reads the webpage under the subheads "Regular credit checks", "Delays in billing", and "Your monthly access fee" respectively. It appears that E. Ross did not take the time to read the webpage.
More particularly we explain under the head "Regular Credit Checks": "Your account may be checked against your Credit Limit a few times a day. Although your local and national calls and TXT messages are billed to your account straight away, the total sum of those calls is credit-checked at intervals only. Therefore you may go over the Credit Limit before you receive the TXT notification.".
In relation to "Delays in billing" we state: "There are some other instances when, for reasons beyond our control, there is a delay in billing the charges to your account. This means that there could be times when you will be able to make calls and send messages even though you have gone over your Credit Limit," and go on to specify the billing lag affecting international and 0900 charges.
For any of these reasons then, E. Ross may have incurred monthly charges in excess of $45 before receiving notification that his credit limit had been exceeded. But his experience of our credit limit service would surely have been very different if he had attended to what is written under the head: "Your monthly access fee". There we note that: "It's easy to forget that your access fee is charged automatically to your account every month, so it could take you over your Credit Limit without you realising it. It might help to think of your Credit Limit as the amount you have left after your access fee is taken out. For example, if your Credit Limit is $80 and your access fee is $30 a month, you've actually got $50 to spend.".
E. Ross was on a Choose 20 plan of $19.95 inclusive of GST per month, with an 'add-on' of 200 off-peak minutes at $11.95 per month, also inclusive of GST, which could be added and subtracted at will (Vodafone does not offer a "200 plus" plan). His access fees were therefore $31.90 per month. E. Ross asked for a credit limit of $45.00. As our webpage explains, with a credit limit at $45, a Choose 20 plan with a monthly access fee of $19.95, and an "add on" of $11.95, the system was allowing him to spend an extra $45 over and above his plan, making $76.90 in all. To keep total spending below $45 per month, the credit should have been set at $13.10.
E. Ross used his mobile over and above his plan. He set a credit limit which gave him $45 to spend over and above the $31.90 he was paying in access fees rather than the $13.10 which would have been appropriate had he wished to contain his total monthly spend to $45. He also did not take account of his text messages which belong to different system to the calling one. These amounted to 60 for that month and went over the credit limit.
E. Ross refers in his email to "further frustrations" he has experienced in contacting us. While relevant to our webpage, only in that our webpage invites customers to call us on 0800 800 021 if they can't understand why they've incurred charges over the limit, we would like the Board to be aware that following E. Ross' call his account was checked, and a customer liaison specialist was assigned. When unable to contact E. Ross by phone the customer liaison specialist wrote to him (copy attached), noting that Vodafone's customer services representatives do explain the terms and conditions around the credit limit, and referring him to our website. Since it is our practice to give customers the benefit of any doubt, and we could not be certain that any particular representative had explained the credit limit fully, we credited E. Ross the extra charges, less $45, to his account. The customer liaison specialist asked in his letter if E. Ross could provide a date and time when he would be available to make telephone contact and did not hear further from E. Ross until receipt of E. Ross' letter dated February 2nd, after E. Ross had deactivated.
Vodafone has been more than happy to accommodate E. Ross' query and assist him with understanding the credit limit. We consider our website advertising to be clear in its recommendations to customers, and believe Vodafone's infrastructure has supported the customer to the extent possible, even allocating him a single point of contact who was available to him at any time.
We trust that this addresses any questions the Board might have but are, of course, happy to answer any questions or provide any further information which the Board may find helpful."
The Complaints Board perused all relevant correspondence and the advertisement. It noted complainant, E. Ross, was of the view that the advertisement was misleading.
The Chairman directed the Complaints Board to consider the advertisement in relation to Rule 2 of the Code of Ethics.
The task before the Complaints Board was to determine whether the advertisement contained any statement or exaggerated claim which was likely to mislead the consumer, thereby breaching Rule 2.
By way of introduction, the Complaints Board reiterated its long held position, that should a claim in an advertisement be subjected to a challenge, the onus lay with the advertiser to substantiate that claim.
The Complaints Board expressed recognition of the fact that offers around cell-phone usage could be complex, but noted the advertisement before it clearly set out the details of the offer. The Complaints Board noted that the advertisement included a prominent heading which said:
"Ways you might exceed your limit."
Below that heading was a clear explanation of ways in which this could occur. Also, under the heading "Regular credit checks" was the statement: "Therefore you may go over the Credit Limit before you receive TXT notification."
The Complaints Board then noted the advertiser's explanation regarding the plan to which E. Ross had subscribed and the circumstances under which E. Ross' credit limit had been exceeded. It noted that an 0800 number was given in the advertisement for further information and queries, and said that although E. Ross may have experienced "further frustrations" when using that option, Vodafone had addressed the issues raised by the consumer by assigning a customer liaison specialist who researched the consumer's account and made every effort to explain and assist the consumer with their query. Furthermore, Vodafone had credited the customer the extra credit, thereby demonstrating their willingness to resolve the issue.
In conclusion, the Complaints Board was of the view that the advertisement clearly set out the conditions pertaining to the offer, and alerting consumers as to how the system worked. As such, the Complaints Board said the advertisement was not misleading and was not in breach of Rule 2 of the Code of Ethics.
Accordingly, the Complaints Board ruled to not uphold the complaint.
Decision: Complaint Not Upheld